2/2/15…Friday was some kind of day…Super Bowl rocked!!!

TB’s Wine Quote of the Day: “One should always be drunk. That’s all that matters…But with what? With wine, poetry, or with virtue, as you choose. But get drunk. – Charles Baudlelaire

Bloomberg Quote of the Day: “We die only once, and for such a long time.” – Moliere

This week’s economic calendar is full of important indicators. The highlight of the week will be the ISM Manufacturing Survey (Monday), ISM Non-Manufacturing Survey (Wednesday), Employment Situation (Friday). We will also get December Personal Income and December Construction Spending (Monday), December Factory Orders and January Motor Vehicle Sales (Tuesday), January ADP Employment (Wednesday), Q4 Productivity & Costs and December International Trade (Thursday) and December Consumer Credit (Friday). Courtesy of Economic Advisory Service

Overnight Global Markets:
Global equity markets weaker for a 2nd day (ex-Germany): UK – vs -0.5% vs -0.5% vs -0.1% vs -1%! France –0.2% vs -0.7% vs -0.1% vs -0.4% vs -1.5%! Germany +0.4% vs -0.5% vs +0.1% vs +0.4% vs -1.4%! Japan -0.7% vs +0.4% vs -1.1%! vs +0.2% vs +1.7%!!! Hang Seng –0.1% vs -0.4% vs -1.1%! vs +0.2% vs -0.4%; Korea +0.2% vs -0.1% vs -0.5% vs +0.9% vs –; India -0.2% vs -1.7%!!! vs +0.4% vs +1% vs closed. U.S. equity futures gapped up on open but well off their session highs: DOW +48 (range 89 +gap 24!); SPX +4.80 (10+3); NDQ +5 (20+3).
Global Money Markets: Libor: 0.253% 3 mos; 0.357%; 6 mos – still hovering near their recent record lows! The Fed Funds rate has averaged 0.09% and is 0.12-0.14% – 0.14% is a new the 9-month high! T-Bills: 0.00%, 1 mo; 0.01%, 3 mos; 0.04%! 6 mos; 0.14% 1-yr – back from 0.25% – the 12-month high, boring!
U.S. Treasury Bonds weaker but coming off those new 12-month lows – ignore! 1.67% -1/4; 30’s 2.25% -11/16; Long TIP: 0.51% -5/8 – back where they were Friday a.m.!
European Bonds: Mostly higher – but closed at even lower new lows after Friday’s posting,, except PIIGS which are coming back from Friday’s selloff…sort of… Germany 0.31% +1; UK 1.37% +5; France 0.55% +1; Italy 1.62% +3; Spain 1.47% +6; Portugal 2.68% +7; Greece 10.55% -24 – new recent range: 7.03% to 10.79%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.28% +1; low is 0.19%!
Dollar Index little change and still in a tight range following Monday’s 95.527, highest since 9/30/03! Currently 94.75 -.06. Euro: 1.1313 -.0027, following last Monday’s 1.1098 – an 11-year low!!! Sterling 1.5031 +.0018, after bottoming out last Monday at $1.4952, with critical support at $1.48, a double-bottom from 3/29-31/2013! Yen doing little but at least it is stable at 117.62 +.07 – support is 119, the 40/50 day m/a’s! 1/15’s 115.86 was best since 12/17/14’s 115.57 – weak since peak Oct. ‘14: 105.23; recent best 2/4/14 @ 100.76!!! Record: 12/30/11: 75.35!!!
Commodities: Gold trading slightly lower in another inside session at $1272.70 -$6.50 following Friday’s retrace of Thurday’s loss and bounce off the 200 day ($1253.97). Silver slightly lower too after Friday’s feeble attempt to bounce of the 200 day ($16.76), and is now $17.10 -.11. Crude was unconvincing it its retrace from the 1/29 low of $43.58, despite that nearly $4 rally Friday – short-covering following the plunge in rig count! It is now $48.76 +.52 with a session high of $50.56 but with res at $51.27 – a lone print from 1/15. Avoid!
Friday’s Market Summary:

Two things: first, Stocks, while valiantly trying to ‘fight the tape’ lost in a burst of glory (?). (NOTE: ytd Dow Utilities are UP 3.1% (annualize that!); the rest are off from 2% [NDQ 100] to -5% [Dow Transports]). NYSE Financials are off 6%, led by KBW Banks -10.1%!!! BofA is off 16.8%!!!; Citi and JPM -13.1%; WFC just -5.3%. OUCH!!!
The reason: Europe’s deflation is increasing as prices are plunging at a pace last seen in the depths of the recession of 2009. Annual inflation rate fell to MINUS 0.6% – biggest decline in the history of the Euro!!! Unemployment in the Eurozone only slightly at 11.4%. Source: Bloomberg News.
They were in good company because European markets were taken down by about 0.5% while India was crushed: -1.7%!!!
The second was Crude, late in the session, which like Gold (which had it biggest dollar gain since 2012 – yet failed to get anywhere close to $1300 – high was $1284), rallied sharply to $48.35, highest since Jan.22nd, and closed $48.24 +$3.71!!!. The reason for this was that in the afternoon, Baker Hughes released their ‘rig count’ which was the lowest in three years! That could be a head fake but as T. Boone Pickens said on CNBC just on Tuesday (TB heard and reported it): price of crude will bottom in February, but when the rig count falls it is time to buy. His target: $80 – sometime this year. So there was no reason to stay short. Boone is to oil what Buffett is to stocks.

Stocks held in pretty well until the afternoon while bonds continued to rally – to new 12 month low yields! Then they gave up the ghost closing at or near the lows. All indices were negative, even Dow Utilities? -2.3% and the goat! …along with Transports; then Russell 2000 -2.1%; Dow -1.5%. SPX -1.3%…and the ‘best’, the two Nasdaqs -1% and 0.8% respectively. NYSE Financials lost 1.7%!
Volume shot up to 4.54B shares – which you don’t want on a selloff, and especially shares traded on the NYSE floor rose to 1.22B shares – highest since 8/8/11!!! A/D’s and Breadth were negative again ranging from -2x to -3.1x! New highs were pretty steady at 300 while new lows went from a high 275 to 223 – still high! S&P VIX EXPLODED to the upside and despite the earlier small positives in the indices, ‘gapped up’ on the open and closed at a HUGE 20.97 +2.21, +11.8%!!! Since Monday it is up 34.3%!!! and that, folks, is BEARISH!!!

Total NYSE Volume surged to 4.54B shares vs 4.1B vs 4B vs 3.31B, a low 2nd only to Jan.2, vs 3.4B – 12/24’s 12-month low was 1.4B shares. Shares traded on the NYSE floor rose by 50% to a HUGE 1.22B shares (highest since 8/8/11!!!) vs 863M shares vs 856M vs 711M – 2nd lowest of ’15; vs 796M- 976M shares is the prior 2015 high. 12/24’s 349M was the 12-month low…average is 741M shares! Since 1/5 the average is 860M shares – vs 840M Thursday! The average for Dec. peaked at 979M shares on Dec. 22nd and has been declining steadily.

Advance/Declines were negative for the 9th time in 14 sessions. NYSE: -2x vs +2.1x vs -2.8x vs -1.3x vs +2.2x; Nasdaq -2.9x! vs +2.0x vs -3.1x! vs -1.7x vs +1.8x; Breadth was worse: NYSE -2.6x vs +1.5x vs -8.7x!!! vs -1.8x vs +2.7x; Nasdaq -3.1x!!! vs +2.1x vs -2.7x vs -2.4x vs +1.9x ; New 52 Week Highs plunged to 294 vs 457 vs 374 vs 369 vs 433 – their range for the last 12 mos. is 39-612!!! New Lows soared to 275 vs 187 vs 100 vs 117 vs 112 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX turned fully BEARISH!!! Gapped up on open to 19.24 then ran to 22.18, before settling at a very bearish 20.97 +2.21!!! – an 11.8% gain +34.3% since last Monday – just below 1/16’s 21.07!!! Last Thursday’s high was highest since 12/16’s 25.20, which was second only to 10/17’s (31.06!) – highest since 11/2//11!!! Average of the past 12 months is 14.58 and steadily climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market closed STRONG with new 12-month low yields across the board: 10’s 1.64% +1 pt. (1.64% low yield); 30’s 2.22% +2-1/8 (2.22% new low!); Long TIP 0.49%!!! +2-9/16 (0.49% new low!). Kowabunga, kimosabe!!!

Gold had its biggest daily gain to the high since 2012 ($1284.30 +$28.10) but not only couldn’t hold – it had an ‘inside’ session and failed again to even get near $1300. Thursday’s $28 loss ended the ‘rally attempt which culminated in 1/22’s high, $1307.80, highest since 8/19/14 – and the ONLY close above $1300 since 8/15/14! Thursday’s low was $1251.00, $3 BELOW the 200 day ($1254)! The close of $1254.60 was lowest since 1/14 when the rally began. 11/7’s low, $1130.40 is the current 12-month low! 7/17’s session high was $1346.60, highest since March 19th!!! After the 200 day, (Thursday’s dive took out first support at $1224.90, the 1/14 low, is the 40 day $1226, followed by the 50 day at $1220. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver, which traded down to the 40 day ($16.74) Thursday, closing at $16.77, came back somewhat, also in an ‘inside’ session, to close at $17.21 +.44. The 200 day ($18.48) is resistance. $14.12 is the recent low (12/1/14), not seen in more than five years!

Crude traded in a very narrow range, and surged to $48.35, highest since 1/22 two hours before the close, a day after setting yet another a new 12-month low of $43.58, after hitting $51.27, highest since 1/5, closed at $48.24 +$3.71! a HUGE – but meaningless gain…all due to Baker Hughes releasing the ‘rig count’ which plunged and forced short-covering as T. Boon Pickens predicted. Thursday’s new low was $44.08, still lowest since 3/09; real or Memorex? Hint: it was skidding along the bottom when the number was released AND wasn’t a key reversal. Remember the ‘negative’ one from 1/22 that precipitated the selloff! $50-52 remains formidable resistance. 12/17’s high was $58.98. Consider: 10/25/14’s high was $84.83. There have been 64!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13, and if is off 59% since then! The record high of $147.27 was on 9/30/08. RES at the 40 day ($53.95!!!), then the 50 day ($58.01), and lastly the 200 day ($86.68) – all continue to fall and will someday (?) be support – albeit the hard way! The range is now $43.58-$112.24 since 3/1/12. Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!). So much for TB’s prediction of a bounce at $43.83, and a a test of that $32.40 March ’09 low looks like it could well occur…by the way that decline from the 9/20/08 high to the low took EXACTLY 6 months – we are now in the 8th month of decline!!!

Have a great week, y’all hear? Was that a ‘thriller’ Super Bowl? Especially TB who won with the exact score 28-24 and over 39 -1/2 points. It doesn’t get better than that. But Russell was by far the best QB…Half Time was incredible…even if TB didn’t get it.

TB

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